MTN to settle Rwanda fine over the next few months - Group CEO

MTN has reached an agreement with the Rwanda Utilities Regulatory Authority (RURA) to pay the fine imposed on the telco in May for "non-compliance with license obligations" by hosting its IT services outside the country.

During its announcement of interim financial results for the six months ended June, the mobile operator revealed that a meeting between MTN and RURA has led to finality on the matter.

Rob Shuter, ‎Group President and CEO MTN told ITWeb Africa that he met with Rwanda's Minister of Telecommunications as well as representatives from the regulator concerning the fine.

"The status of the fine is that we have agreed to pay the 8.5 million dollars, we will spread it over the next few months. That part of the issue is closed now."

Shuter, who was took the reins at MTN a month before the fine was announced, also revealed that the sanction, which totals seven billion and thirty million (7,030,000,000) Rwandan Francs, came after it alerted the regulator of possible breaches on its part.

"In 2011 we were discussing with the Rwandan regulator that we wanted to build a hub in Uganda that would manage a few of the markets. The Rwandan regulator felt very strongly that they didn't want data or resources to be moved from Rwanda into the hub. There were some clear lessons from that and I think over the years our team felt that the real concern was over data sovereignty, that the data should not move. In the end they were in the hub and the team felt they had addressed the concerns and when the whole issue came out, the regulator felt that what had been done did not address the concerns. I think we made mistakes, we did report the issue ourselves - we self-reported. In the end the lesson we must learn from it is to make sure that we fully document any arrangements that we enter into in these markets so that there can be no confusion over a four or five year matter."

Shuter also highlighted that MTN's newly appointed regulatory and public policy team, which attended the results announcement, would work hard to prevent future sanctions against itself by\ regulators.

"The formation of the regulatory and public policy team was done before I was hired so it is not a specific response to that (Rwanda) incident. I think it is much more to say that having a very well resourced and senior Group team to help our markets manage regulatory and public policy is very much required. This is very common across multinationals. We will put that in place and I think it will help us going forward. In time we will reduce the risk of these sort of things happening."

MTN's results for the six months ended 30 June 2017 show a 6.7% rise in Group revenue to R64 315 million which would have been a decrease of 18.5% without accounting for contant currency infromation. The telco says it is on track to meet the 2017 financial year 2017 guidance it communicated in March 2017 despite macroeconomic conditions that "...remain challenging across a number of our markets, with Nigeria continuing to experience a weaker naira as well as hard currency liquidity challenges."